FIG. 1 shows a prior art technique for distributing and protecting media files. A first user device 2 requests and receives an encoded media file from a content server 4, and requests a corresponding digital rights management (DRM) license from a DRM server 6. The DRM license enables the first user device to decode and play the media file on a computer, television, cell phone, etc. The first user device 2 is also allowed to transfer the encoded media file to a second user device 8 using any conventional technique, such as email, Bluetooth, or a portable storage medium (e.g., flash card, CD, DVD, etc.). The second user device 8 then obtains a DRM license from the DRM server 6 in order to decode and play the encoded media file at its location.